M&A Alert—April 17, 2012
Intuit Acquires AisleBuyer
Transaction Size: Undisclosed
On April 10 2012, Intuit announced its acquisition of AisleBuyer LLC.
AisleBuyer has developed a mobile commerce platform and shopping applications that allow retailers to offer consumers a better in-store experience while collecting valuable data on buying habits. AisleBuyer offers solutions for retailers, restaurants and brands. AisleBuyer’s mShop is a mobile self-checkout app that allows shoppers to scan a UPC barcode in the store (using a smartphone camera), see customer reviews and ratings and pay for a product with a credit card without having to stand in line at a register. AisleBuyer’s mClerk POS app enables store associates to assist shoppers with mobile inventory search and product navigation as well as mobile checkout. The AisleBuyer mDine app streamlines ordering in restaurants. The first “powered by AisleBuyer” shopping app was for Magic Beans, a Boston-area toy and baby gear store. Then last year, AisleBuyer announced a partnership with Big Y, a Springfield-based supermarket, to use AisleBuyer mShop to power its mobile shopping application, which allows shoppers to scan barcodes to view and compare product and nutrition information, access customer reviews and receive personalized coupons and offers. Competitors in the mobile shopping assistant space include ShopSavvy, and GlobalBay Mobile (which was acquired by VeriFone) is a competitor in mobile POS.
Founded in 2009, AisleBuyer is headquartered in Boston, has 7 employees and has raised $11.5mm in funding from Old Willow Partners. Andrew Paradise, AisleBuyer’s CEO, met with Chris Hylen, Intuit’s Head of Payment Solutions, last October. After the conversation, AisleBuyer began a pilot test with Intuit’s customers, integrating AisleBuyer with Intuit’s software products. On April 10, Paradise blogged that AisleBuyer would be joining with Intuit’s payments group to develop mobile small business POS solutions.
Mountain View, California-based Intuit is a $4 billion company that provides a variety of software solutions to individuals and small businesses. Intuit is mainly known for its bookkeeping and tax preparation products for small businesses such as QuickBooks, TurboTax and Quicken. Intuit also offers a variety of payment services including QuickBook Merchant Services, which allows small businesses to accept credit cards without a POS terminal. Recently, Intuit launched GoPayment for small businesses, a Square-like mobile credit card app and reader.
Intuit did not disclose details of the transaction, but Bostinno.com reported that the purchase price was in the $80-100 million range. AisleBuyer is a private company and does not disclose revenues.
Other comparable transactions include VeriFone’s acquisition of Global Bay (mobile retail software platform) in November 2011, Raymark’s acquisition of Retaligent (mobile handheld POS and kiosk clienteling solutions) in May 2011 and PayPal’s acquisition of Fig Card (mobile POS payment solution) in April 2011.
Intuit offers a full range of payment solutions for small business, and the AisleBuyer acquisition strengthens their position in mobile payments and point of sale (POS) solutions for retailers.
Architect Partners’ Observations
The reported purchase price of $80+ million is above the norm for companies with only a handful of customers and, presumably, nominal revenues.
It is not clear whether mShop, the consumer shopping app, will be continued. AisleBuyer apparently developed the first two retailer-specific apps and then announced a SDK for other retailers to develop their own customized apps leveraging the AisleBuyer platform. This points to the challenge of whether to serve the consumer (like ShopSavvy) or the retailer (like AisleBuyer and Shopkick).
We expect Intuit to use this acquisition to offer merchant services to small businesses and white-labelled solutions to larger businesses, as it did with the Mint.com acquisition.